U.S. will approve higher ethanol blend

The U.S. government will eventually allow higher levels of ethanol to be blended into gasoline, Renewable Fuels Association President Bob Dinneen said on Tuesday. Ethanol is currently approved to make up 10 percent of gasoline, but producers have lobbied the government to increase the blend level. "I absolutely believe that when all the science is in, the efficacy of using greater than 10 percent blends will be validated," Dinneen told reporters at an Energy Information Administration summer energy outlook conference. Growth Energy and 52 ethanol manufacturers petitioned the Environmental Protection Agency last month to raise the maximum blend level for ethanol in gasoline to as much as 15 percent. Dinneen said he expects the EPA to issue a notice "within days" to begin collecting public comment on the issue. The EPA has 270 days to act on the ethanol producers' request...Reuters

Currently, ethanol receives subsidies through mandated concumption, grants, loan guarantees, tax incentives and tariffs on imports. The tax incentives alone are estimated to be $9 billion in 2009. Higher blends means more subsidies.